Offshoring Support Functions: Is It Working?

The trends toward offshoring will continue to grow as wider ranges of sourcing options develop. However, an offshore help desk and support service is more successful when blended with both onshore and near-shore services. Jeff Lande, senior vice president at the Information Technology Association of America, (ITAA) said that most business process outsourcing (BPO) call center models are blended because it is valuable for companies to offer around-the-clock service and have different levels of expertise in different locations.

Because offshoring help desk and support functions is a viable option, experts stress to look before you leap. Organizations need to be more realistic about the benefits and challenges of offshoring this aspect of customer relationship management. According to Gartner Inc., a world provider of IT industry research and analysis, cost reduction alone is not a sufficient justification for outsourcing—revenue generation and customer service quality are also requirements.

“For most companies, the decision is not as black and white as to offshore or not to offshore,” Lande said. “Companies need to look at this (offshoring) as a maturing model, they need to consider certain aspects of offshoring, and they need to go into these contracts with their eyes wide open.”

Many offshore BPO vendors have grown rapidly over the past two years, and this rapid growth may be interrupting their customer service processes and, as a result, negatively affecting companies’ reputations. Companies should carefully consider a vendor’s record—especially that of its management team—whether it is located here in the United States or abroad.

Most companies outsource support functions, like inquiry logging and entitlement checking, because they require little, if any, verbal communication. “Offshoring is working in most business processes,” said Ron Muns, CEO and founder of the Help Desk Institute (HDI). “However, the most difficult are call centers, and that is because it really revolves around language and English neutralization issues. The most successful things to send overseas are things that require intelligent people and don’t require a lot of language.”

Language is considered a major obstacle when offshoring help desk and support functions, and because telephones are the most frequently used channel of support, such training is critical. Muns said that companies are not providing enough English training to offshore support centers.

“Training programs need to be better. Most companies use a five-week program to teach people English and American culture,” Muns said. “Can you really learn language and culture in five weeks? Because it is not that expensive, why don’t these companies jump the training to five months? I mean, who cares if the cost is $4,000 rather than $1,000.”

Organizations utilize many channels of support other than telephones, such as e-mail, chat, fax, walk-up, letters, etc. Both Muns and Lande agreed that language can be an issue, but it is ultimately an organization’s responsibility to decide whether language barriers or accents will affect customer service.

“The client that is buying these services—whether it is onshore, near-shore or offshore—has responsibility to its customers to monitor the performance of its vendors and to insist on changes if the level of customer service is not being met,” Lande said. ”But, you and I both have probably called tons of call centers and ended up overseas or onshore and had no idea of whether the person we were chatting with was from the United States or from 10,000 miles away.”

According to Muns, online chat support is a successful function to offshore. “A lot of companies have several chat supports in several parts of the world, and the group with highest satisfaction area is India because you don’t hear the dialect and some of the language problems,” Muns said. “And if the chat associate is unable to resolve a problem with the chat, then he or she will be transferred to speak with someone in the United States.”

Cost is perhaps the biggest issue regarding offshoring. The initial buy-in cost to transfer services offshore or to a different location onshore can be significant. Although companies are saving money, Muns believes only larger companies are truly reaping the benefits of offshore labor costs.

“In order to offshore a function, companies need a certain volume of work before it is even plausible,” he said. “It is not attractive for smaller companies because of the overhead associated with doing it, the management process of flying people back and forth, and you don’t relinquish management solvability.”

Recent Gartner research suggests that the main processes of customer service and support will remain located in, or near, target markets through 2008. However, in today’s global and competitive marketplace, offshoring some business functions may become necessary in the near future. So understanding what type of support model works best for your organization—whether offshore, near-shore, onshore or a blended model—is important to meet the evolving needs of your customers.